City balances budget, temporarily
October 27, 2010 | 11:09 AM
It appears as if some members of the City Council heard loud and clear the pleas from those residents struggling in this economy.
For a couple hours Monday night, the city had balanced its budget and planned to not increase its tax rate for 2011. But, that all may have changed at the end of nearly five hours in the council chambers.
The final item of the night was a failed vote to remove the city's staff assessor, Grace Lininger, and replace her with a firm, Accurate Appraisals, in order to cut future expenses. Six votes were needed to change the assessor, and the vote was 5-3 in favor of removing Lininger. Alderwomen Mary Jo Fesenmaier and Arleen Krohn and Alderman Bill Mott voted against removing her. Some of those who voted to remove her were adamant that it had nothing to do with her performance. They said it was all about saving the city money.
The decision occurred a few hours after the council members voted 6-2 to cut $18,000 from the 2011 budget, the savings estimate for next year if the city no longer had a staff assessor and hired Accurate Appraisals. Mott voted for the $18,000 budget cut.
In future years, the savings would be about $50,000 per year by hiring Accurate Appraisals. The cost of the current assessor's office is about $100,000 per year.
But, according to City Administrator Dennis Jordan, the budget now is in worse shape than just having to put back in the $18,000.
He said the contract with Accurate Appraisals also included a full city revaluation. Now the city will have to pay an additional $90,000 over the next two years to conduct the revaluation. That amount is over and above the $100,000 assessor's office budget.
Jordan said that means the city still has a $63,000 shortfall for 2011. On Tuesday, Jordan said he is not sure what the council will do next to try to balance the budget.
The council is expected to vote next Monday night, Nov. 1, at 6 p.m., to publish the budget summary, which will include expenses, revenues, the levy and more finalized numbers. A public hearing on the complete budget is being scheduled for Monday, Nov. 22.
Most of the decisions regarding the budget occurred during a special workshop, which preceded the Finance, License and Regulation and the City Council meetings Monday night.
The council started with a $135,260 deficit Monday, which had followed a $292,740 shortfall reported last week. In order to balance the budget, members of the council agreed to several cuts to reduce that total to $57,000. That figure included the $18,000 assessor cut. A tax increase that would have been $6 per $100,000 of assessed value could have paid for that initial shortfall.
However, instead of increasing taxes, the council agreed the revenues from an increase in parking meter costs per hour will be used to balance the budget and even replenish some of the funds in the Parking account.
The action Monday night followed a workshop last Thursday when council members agreed to move $75,000 from each the lakefront and parking funds to cut into the deficit and drop it to the $135,000 figure. Three weeks ago, the deficit was $550,000. That was when city officials asked the department heads to go back to the 2010 budget and try to cut further from there.
On Monday night, among the cuts were the end of the summer leaf and brush pickup from June through September. That will cut part-time employees and save the city $15,000. Initially, council members initially voted that the city's staff assessor would be replaced by a Accurate Appraisals, a firm that will perform the assessment work. However, at the end of the regular council meeting the effort to replace the current assessor with the firm, failed because it didn't receive six votes. That change would have saved $18,000 in 2011 and about $50,000 per year in future years.
Smaller cuts included $4,000 for a person to run the community service program at the Four Seasons Nature Preserve; $3,000 for Plan Commission personnel salaries and $3,000 for Christmas gift cards for city employees.
Fesenmaier voted against all five cuts. Krohn voted against the Four Seasons Nature Preserve and assessor personnel cuts. Kehoe was against eliminating the employee's gift cards and Alderman Hartz, a member of the Plan Commission, was against eliminating the Commission salaries.
Revenue increases will come from an increase in the adult beach admission of $1, which is expected to bring in about $30,000 per year. Fesenmaier voted against increasing the fee.
Only Alderman Frank Marsala voiced an opinion on looking at raising the tax rate to make up for the $57,000 shortfall. He said he didn't think it would hurt to raise someone's tax bill for $12 increase on someone with a $200,000 home would "hurt."
"The taxpayers are expecting some kind of increase," Marsala said. "They know costs are going up. It's a bearable load. I'm no different. I am counting pennies, too."
But, the other aldermen said it wasn't a good time to raise the rate.
"We are just one of all the other agencies asking for $12 or $20," Hartz said. "People are trying to figure out how to make their budgets. People are losing their jobs. It seems like only $12, but it's on top of hundreds of other dollars."
Aldermen agreed to raise the parking meter costs from 50 cents to $1 per hour. It appears as if the city will purchase a new parking system, which will be paid for mostly by the current balance in the Parking fund.
The increase in the parking fees could raise between $200,000 and $400,000 per year.
City Administrator Dennis Jordan said $57,000 of the increased revenue will offset the 2011 budget deficit and the remainder will go into the parking fund. That means the city's portion of the tax rate is not expected to increase.
"We want to see the city's levy stay down," Krause said. "Even if we're the only ones doing it."
The city's portion of the total tax bill is 27 percent. The other taxing entities include the school districts, Gateway Technical College, Walworth County and the state of Wisconsin.
Because of the numerous changes made Monday night, officials agreed to have City Comptroller Peg Pollitt bring back more finalized numbers to next week's Committee of the Whole meeting.
Opposition to borrowing, budgeting
While city officials seemed pleased with their efforts on the budget, resident Terry O'Neill voiced his concerns over the city's spending during the public comments portion of the Finance, License and Regulation Committee meeting.
"The city doesn't have a revenue problem, it has a spending problem," O'Neill said.
He said the city is planning to borrow $3.5 to $4 million which he said will be general operations bonds and used to cover expenses.
"It is a continuation of the city's downward financial spiral," he said. "No one has ever solved a spending problem by borrowing money."
Last week, council members discussed at length a list of capital projects and whether to borrow to fund the needs. Following an agreement by the council members, the city has included in its 2011 budget, about $100,000 to fund the first year of borrowing for possibly $3.5 million for capital expenditures.
According to city officials, as discussed last week, the borrowing would have to be used during the next three years to fund items such as a new Lake Geneva Fire Department ladder truck at a cost of about $1 million, road work at a cost of about $1 million and several other items listed as needs in the near future by the city's department heads.
Former Alderman Pete Peterson suggested a few possibilities to reduce the city's budget. He said items that need to be addressed include funding for the cemetery, the museum and the harbormaster.
"In order to tackle the budget, you need to fundamentally change the way you think about things," Peterson said. "You need to ask the root cause of expenditures. "
He said the cemetery has been badly managed, the museum should be self sufficient and the city should be charging rent rather than subsidizing the facility and the harbormaster position should be eliminated.
The museum receives $12,000 for personnel and is allowed to use the facility. The city maintains the building because it is owned by the taxpayers. The harbormaster receives a part-time salary of about $25,000.
City's financial status
Although officials battled over the 2011 budget, Krause has said the city's finances are in solid shape. The city currently is $5 million in debt, which will be paid off by 2016. The new borrowing would be paid back using the money now slated to pay for the current bonding.
The city also has about $1.9 million in its general reserve fund. Krause said sales of the WE Energies property on the Edwards Boulevard extension could add another $1 million to that total. There also are hopes that the additional revenues garnered through the parking meter increases will help the city replenish more for its reserve fund.